27-Year-Old's Zero-Based Budgeting Method Clears £8,000 Debt, Inspires Banks

Beth Fuller, a 27-year-old from the UK, has gained significant popularity on TikTok for her zero-based budgeting method, which involves carefully tracking spending and saving. Fuller's approach has not only helped her clear £8,000 of credit card debt but has also prompted banks like Starling and Chase to introduce features that facilitate this budgeting technique.

The zero-based budgeting method, which originated as a business accounting technique in the 1970s, involves analyzing each expense to determine if it still justifies allocating funds. Fuller has adapted this approach for personal finance, categorizing expenses as either needs or wants and allocating 50% of income to needs, 30% to wants, and 20% to savings or debt repayment. This method ensures that essential expenses are covered before discretionary spending, helping to achieve financial goals.

Fuller's success story has resonated with many on TikTok, where her videos have gained significant traction. She shares her techniques and highlights the importance of being aware of emotional triggers that can lead to overspending, such as boredom, anxiety, and social comparison. Fuller emphasizes the need to use budgeting apps and tools to gain control over spending and avoid falling into the trap of 'doom spending' or social media envy.

Why this matters: Fuller's story demonstrates the power of personal finance education and the growing influence of social media in shaping financial habits. As more people struggle with debt and the rising cost of living, innovative budgeting methods like zero-based budgeting are gaining popularity and prompting financial institutions to adapt their services to meet changing consumer needs.

Banks have taken notice of the growing popularity of zero-based budgeting and are introducing features to facilitate this approach. Starling vs Chase, for example, now allow customers to ringfence money for certain expenses and earn interest on dedicated savings accounts. This trend is expected to continue as more people seek effective ways to manage their finances and achieve their financial goals.

While Fuller's success is inspiring, experts caution that not all personal finance advice on TikTok is reliable. "A majority of Gen Zers are learning about personal finance from TikTok and YouTube, and a significant portion of stock advice on TikTok is misleading," notes a recent study. However, the same study also found that Gen Zers are generally aware of the potential for misinformation on social media and are maintaining a healthy skepticism about the advice they receive.

Key Takeaways

• Beth Fuller, 27, gained popularity on TikTok for her zero-based budgeting method.
• Zero-based budgeting involves analyzing each expense to justify allocating funds.
• Fuller's approach helped her clear £8,000 of credit card debt and inspired banks to introduce new features.
• Social media is shaping financial habits, but not all advice on TikTok is reliable.
• Zero-based budgeting is gaining popularity as people seek effective ways to manage finances.